Business travellers driving Perth hotel recovery

Hotel room rates in the Perth CBD have risen 9.6% in the first six months of the year and are now almost back to pre-GFC levels, according to a report by research firm STR global.

The Western Australian capital has led a nationwide revival in hotel room revenue increases across all the major capital cities, with rates rising 8.1% in Brisbane, 8.4% in Sydney and a more modest 2.2% in Melbourne.

Bryon Merzeo, business development manager from STR Global Australia and New Zealand, says the corporate business purse driven by the mining sector is leading the revival in the Perth market.

“International growth is not that powerful, but domestic consumer stays on Tuesday, Wednesdays and Thursdays have been incredible,” Merzeo told Property Observer.

Another factor pushing rates up to levels last seen four years ago is a lack of new supply in Perth.

It is also a key reason why Sydney and Brisbane has registered growth comparable to Perth over the period.

“No new hotels have been built in Sydney over this period,” Merzeo says.

In comparison, the more moderate growth in Melbourne reflects new hotel stock coming on to the market in the Melbourne CBD.

Merzeo expects these growth rates to be sustained over the next few years.

Apart from Brisbane, Queensland continued to suffer, with Cairns and Port Douglas revenue per room rates down 6.8% and revenue down 2.4% on the Gold Coast.

Across Australia, hotel occupancy is currently around 75%, with the revenue per room about $125 for May 2011. This is compared with $129 two years earlier.

STR Global bases its growth forecasts on daily data from 750 hotels across Australia.

It does not provide rate increases in dollar terms for each city due to the diversity of hotel stock.

However, official ABS tourist accommodation figures for the three months to March 2011 correspond with the strong growth reported by STR Global for the six month period.

For the first three months of the year, Perth occupancy rates climbed from 70% to 84%, with takings per room per night up $182 to $205.

STR estimates that at least 90,000 hotel rooms will be added each year to the Asia-Pacific region within the next six years. Of these, just 4,000 are estimated to be in Australia.

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer


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